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This may include awarding management contracts at six major airports to private sector players and development of 50 low-cost airports on a fast-track basis.
The Bharatiya Janata Party (BJP) in its Election Manifesto has already indicated that it would look at modernising "existing and operational airports, and build(ing) new ones especially connecting smaller towns and all tourism circuits."
The new government would encourage participation of the private sector in such projects to tap into resources as well as expertise. An institutional framework would be established for the same, while regulators would be given greater autonomy as well as accountability.
Amber Dubey, partner and head (aerospace and defense), KPMG India, "Air transport is a critical element of a nation's infrastructure, enabling global business and tourism. The new government is likely to accord high priority to this sector and is expected to make significant corrections in policies, procedures, infrastructure, taxation structure and skill development."
Key projects pending with the Ministry of Civil Aviation (MoCA) as relates to the award of airport management contracts at Chennai, Kolkata, Lucknow, Guwahati, Jaipur and Ahmedabad to private operators, are expected to be taken up on a fast-track basis by the new government.
The ministry of civil aviation had been considering awarding the management contracts at pre-determined rates rather than on a cost-plus basis to safeguard passengers against high user charges post award of the projects. Under the formula being considered, landing and parking charges at airports would decrease by around two per cent annually and thereafter the tariffs be indexed in line with the inflation rate to ensure some amount of certainty about the charges to be levied on passengers.
Also on the anvil, is development of 50 new low cost airports by the Airports Authority of India across the states of Andhra Pradesh, Jharkhand, Bihar, Punjab, Uttar Pradesh, Arunachal Pradesh, Assam, Madhya Pradesh, Odisha, Rajasthan and Maharashtra. Further, eight greenfield airports are slated for development in Navi Mumbai, Juhu, Goa, Kannur, Pune, Sriperumbedur, Bellary and Raigarh.
The development of such new airports is now likely to see a push as the manifesto hints at the "potential for (developing) inland air transportation to various remote and local locations in the country. Such air strips will be developed so that low cost air travelling becomes possible within the country. "
"The next phase of growth of Indian aviation will be driven by no-frills airports in India's interiors. The new Government should focus on enhancing regional connectivity to have an equitable development of air connectivity across the country. Other key initiatives could be abolition of the discriminatory 5/20 rule, privatization of Air India , rationalization of taxes for MRO and ATF, fast-tracking of stalled PPP airport projects, creation of an independent ATC organization and flexible use of defense airspace", Dubey added.
A cabinet note to abolish the 5/20 rule had already been prepared and was expected to be cleared before elections were declared in March this yearbut was put on hold. The new government would now have to take a call on lifting restrictions on domestic airlines to have a minimum fleet of five aircraft and five years of operational experience (known as the 5/20 rule) to launch international services.
If approved by the new government, domestic airlines would only require permission from the Directorate General of Civil Aviation (DGCA) to start international flights. The DGCA would give permission depending on the airline's safety record and financial capability. The abolition of the 5/20 rule would largelt help greenfield ventures AirAsia India and Tata-SIA, who have evinced interest in commencing international operations from India.
Industry stakeholders also expect the new government to develop a transparent policy for enhancing bilateral seat quotas with other countries, linked to objective criteria like investments, incremental traffic, employment and strategic interests of India. "Indian aviation needs a fundamental overhaul across the value chain. We remain over regulated and under managed and without transparency. We need to re-orient the sector to India's interest", said Kapil Kaul, chief executive officer, Centre for Asia-Pacific Aviation (CAPA).
Outlook for aviation sector
* Modernise existing and operational airports
* Build new ones especially connecting smaller towns and all tourism circuits.
* Develop air strips in remote locations to facilitate low-cost air travelling
* Encourage public private partnership to tap into private sector resources as well as expertise
* An institutional framework would be established for PPP initiatives; while regulators would be given greater autonomy as well as accountability.
